Finmeccanica Creates Ethics Committee

Italian defense and aerospace giant Finmeccanica has established a committee to oversee the ethics of its leaders in the wake of the Indian helicopter scandal.

The company’s board of directors met on April 15 to create the committee, which according to the company has the “task of singling out and proposing the criteria and behavior” for the group. The move comes following the scandal surrounding the sale of 12 AgustaWestland-built VIP helicopters to the Indian air force. Investigations into possible corruption resulted in the arrest of former Finmeccanica chairman and CEO Giuseppe Orsi and the CEO of AgustaWestland, Bruno Spagnolini. Both have since stepped down and been replaced.

The six-member committee, which will report to the Finmeccanica board, includes experienced members of Italian industry and judiciary.

The company says that the committee’s recommendations will be “accepted and assessed by Finmeccanica with a view to further enhancing its behavioral standards. Finmeccanica also commits to entrust an independent third party with the task of evaluating and monitoring how the recommendations have been implemented by the group.”

Further changes include having a third party audit the purchase of computer software, engineering and consultancy services from 2010 to 2012. The process will be completed by March 2014, the company said.

Investigators from India and Italy are continuing to look into the helicopter deal, and recent reports suggest the Indian defense ministry may blacklist the company from carrying out defense deals. Blacklisting would be disastrous because the ministry wants to spend around $100 billion on modernization in the coming years.